Apple vs. Microsoft: Is The Past A Prologue To The Future Of Technology?

My father was always fond of saying, ‘What goes around, comes around‘ which seems to imply some sort of cosmic balance of karma that affects our actions, good or bad.

Likewise, Shakespeare’s ‘What’s past is prologue‘ might give us some insight into the trials and tribulations and the future of the Apple vs. Microsoft saga that is playing out today.

Karma Is A Bitch

If Shakespeare was correct, and what’s past is prologue then history obviously influences and sets the context for the present, and should give us a heads up on the future.

When it comes to Apple, Microsoft, and the future of personal technology, I’m not so sure it’s easy to read the tea leaves to see what’s coming.

After all, Apple was crushed by Microsoft back in the OS wars of the 1980s and 1990s, which almost caused the company’s complete demise.

Microsoft defeated Apple and the Mac for many reasons, not the least of which was to license Windows (and attach Office as buyer bait) to many manufacturers while Apple went alone into that good night.

Yet, here we are, 15 or 20 years later, Microsoft is a lumbering, clumsy giant, while nimble Apple has amassed more riches than any company in history.

What happened? Can the past tell us why Apple has succeeded in recent years, and why Microsoft has not? And, can we derive from their competitive history, what will take place in the future?

The Past Is Now. Again.

Why Microsoft had early success against Apple has already been chronicled ad nauseam. Apple fell asleep for a decade or so, failed to create products with the capability of disruptive innovation, while Microsoft pummeled PC manufacturers and users into collective, monopolistic submission.

That was then and this is now.

After Apple co-founder Steve Jobs returned to the company, Microsoft appeared to fall asleep. I don’t think that’s an accurate analogy. Under CEO Steve Ballmer, Microsoft maintained their monopoly over the PC business, but failed to invent the future despite spending tens of billions of dollars trying.

Go down the list. Tablets, smartphones, search engine, consumer products, games. Despite the expenditure of untold billions, all were financial failures in the 21st century.

Apple didn’t really create those industry segments as much as redefine how they should operate, and they became the de facto standards. Apple’s forte as a company has been to create products with the capability of disruptive innovation.

Microsoft dominated the personal computer landscape not so much with disruptive innovation as with hard, cold, and often illegal business practices, at a time when the company’s major competitor was navigating in darkness. Since then, other attempt by Microsoft to influence a technology industry segment has met with financial failure.

If past is prologue, can we expect Microsoft to succeed, prosper, and defeat Apple in the near future?

No.

Microsoft’s purchase of Nokia’s manufacturing business is an admission of defeat– licensing a smartphone OS when the de facto smartphone OS standard is free is not a model with legs. In every endeavor except Windows and Office, Microsoft is bleeding money. And even that once prosperous business is shrinking in the mobile millennium.

Microsoft’s competitors are now in a position of superior strength, while Microsoft is weakening. That’s a far different scenario than what occurred when Microsoft became a monopoly, and it is likely to continue for many years.

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About Kate MacKenzie

I'm from Brooklyn, New York, used a Mac for more than 25 years, and have followed Apple since the last century. Read more of my articles here. My personal site, PixoBebo, is all about Apple. Follow me on Twitter.

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Comments

Everyone is entitled to an opinion, of course, but ‘Great’ depends upon the eye of the beholder. Microsoft was and is highly profitable in the core Windows and Office business. And, except for the past decade with Ballmer at the rudder, Microsoft returned riches to shareholders almost beyond belief.

All that ‘great’ was squandered on Ballmer’s watch, and Microsoft is pretty much irrelevant in the rapidly growing mobile segment which will dwarf the traditional PC business soon.

Apple has gotten rather healthy and wealthy as of late, but Microsoft seems to still have plenty of life and cash in it yet. Windows isn’t going to disappear overnight and Apple certainly isn’t directly trying to make it go away permanently. If Microsoft was in Apple’s place it probably would have attempted a death blow however, Apple seems content to just focus on mobile and not trying to blitz the desktop. Although I’m an Apple loyalist, I do like Windows OS for certain things and the Xbox is a fine gaming console. I’m not hoping Microsoft goes away but I’d always wanted to see Apple get more market share and achieve some sort of parity with Windows.

Microsoft has plenty of cash, yes. About 25% of what Apple has. But where’s the evidence of ‘plenty of life?’

Windows and Office will be around awhile but both revenue and profit from that unit alone will continue to shrink. I expect to see huge layoffs a Micronokia over the next two years. The company cannot afford that many bodies on a shrinking profit machine.

You can bet that Apple understands that the Mac has run its course– sales are slowing, and that means profits from the Mac will drop over time. So, to keep the future coming, Apple needs more products that sell in greater numbers to make up for the losses.

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